Israeli fintech startup Melio, the developer of a payments platform geared toward small and medium-sized US businesses, raised another $250 million for its Series D round, sending its valuation soaring to $4 billion, the company announced on Tuesday.
Melio last raised $110 million in January at a valuation of $1.3 billion. It is considered one of the fastest-growing companies in Israel, having nearly quadrupled its worth in eight months. The latest investment brings its total fundraising to over $500 million.
The company was founded in 2018 by entrepreneurs Matan Bar, Ilan Attias, and Ziv Paz, and launched its platform in 2019, tapping into a massive B2B (business-to-business) payment industry in the US that still often involves payments to suppliers by checks and paper invoices, long payment cycles, and cumbersome processes.
While consumers have started getting used to payment apps to transfer money between friends or to service suppliers, small businesses have lagged. Melio says its platform allows businesses to transfer payments faster and more easily, while providing them with data insights about their cash flow.
“Our mission is to keep small businesses in business. We do this by allowing small businesses to manage payments remotely, paying when and how they want, giving them more control and helping businesses manage cash flow. Business payments shouldn’t be more complicated than paying a friend with your phone,” Bar, who serves as Melio CEO, said in September.
The startup has indicated that the COVID-19 pandemic has fueled some of its rapid growth as the global crisis has forced an accelerated adoption of digital solutions.
Melio said in a statement Tuesday that in the last 18 months alone, it has grown its monthly processing volumes by 5,000 percent.
“2021 has been a year of rapid growth for Melio,” Bar, who previously led Consumer P2P Payments at PayPal, said in the company statement Tuesday. “We found ourselves in a fortunate position to support small businesses more than ever before, helping them digitize their vendor payment operations, saving them valuable time, and maximizing their cash flow.”
The company said that the latest investment, co-led by New York firm Thrive Capital and existing investor General Catalyst, will be used to fuel partnerships with financial institutions, software providers, and marketplaces interested in enabling B2B payments for customers.
In June, the company partnered with Capital One to increase access to accounts payable and receivable cash flow management tools for small business customers. Melio’s platform also integrates with QuickBooks, a popular accounting software package with a US market share of about 80%. In 2020, it signed a partnership to roll out a free accounts payable solution that allows QuickBooks users to easily pay business bills.
“Melio has been a critical partner for small businesses as they navigated the financial constraints of the pandemic-induced economic downturn,” said Vince Hankes, investor at Thrive Capital. “For many, the ability to implement and adopt these digital payment solutions has been the key to keeping their doors open – proving that digital payment platforms are critical to small business growth.”
Melio is headquartered in New York and runs an R&D center in Tel Aviv. It recently announced that an office in Colorado will serve as its western US headquarters, with a staff of 250.